Weighted Average (SIA) The following information pertains to the operation of a processing department: MATERIALS CONVERSION Current
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Weighted Average (SIA) The following information pertains to the operation of a processing department:
MATERIALS CONVERSION Current costs $38,600 $421,300 Beginning inventory 1,000 Units Complete 40% Complete Costs $10,000 $44,000 Units transferred—40,000 (total)
Ending inventory 8,000 units Complete 25% Complete Spoilage (detected when the units are 50% complete)
Normal —400 Abnormal—200
. Using the weighted-average method, determine the costs that should be allo- cated to:
a. Normal and abnormal spoilage
b. Units transferred (including spoilage costs if appropriate)
c. Ending inventory (including spoilage costs if appropriate) . Discuss the reasons underlying the different treatment of abnormal and normal spoilage.
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